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Deceptive articles offering stock advice targeted by government

The Securities and Exchange Commission (SEC) is one law enforcement agency you do not want investigating you. When they do, you can bet that they're going to put plenty of time, effort and money into the case.

Which is probably bad news for the 27 different entities and people that have already been charged with creating fake news sites or articles that promoted various stocks as if they were independent and unbiased investors.

That's more than a little bit illegal. If you promote a stock via a blog or any other published source, you have to disclose whether or not you're getting paid to do so or if you have financial ties to the investment. Not doing so is a type of securities fraud.

Some of those charged may or may not have been aware what they were doing was illegal -- although they likely understood that it was deceptive. For example, at least one writer openly used his own name on some of the articles. However, he also wrote under at least nine pseudonyms -- one of which was supposed to be a financial analyst with nearly two decades of experience. They were all savvy enough to bluff their way onto legitimate investment research sites like Benzinga and Seeking Alpha.

While 17 of the defendants have already agreed to settle with the SEC for some serious fines and a promise to halt any further illegal activity, not everyone has admitted their guilt. The websites that they fooled were not implicated or charged.

It's important to note that the SEC leveled charges against not only the chief executive officers of the companies that produced the fake stock advice but also individuals within the companies and nine writers -- meaning that anyone considering entering the freelance market as a writer needs to carefully assess what he or she is being asked to do. The fines levied by the SEC range from around $2,000 to almost $3 million.

If you are caught up in an investigation by the SEC, get legal help immediately from an attorney who is familiar with the complexities of white collar crime laws.

Source: CNBC/Reuters, "Fake financial news under SEC crosshairs," Jim Bourg, April 10, 2017

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